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Bush Official Illegally Concealed True Cost of Medicare Law

  • September 8th, 2004

The Bush administration illegally withheld from Congress the true cost of the new Medicare law, an investigation by the Government Accountability Office (GAO) has concluded. In a formal legal opinion, the GAO said that the administration official who broke the law, former Medicare chief Thomas A. Scully, should repay seven months of his salary to the government, or $84,933.

Earlier this year, Medicare's chief actuary, Richard Foster, said that Scully had threatened to fire him if he revealed the true costs of the Medicare law until after Congress had voted on it. The Medicare law is now projected to cost $534 billion over the next 10 years -- $134 billion more than was estimated when Congress was debating the legislation last fall. Foster has said that the higher cost projection was known before the final House and Senate votes but Scully allegedly told him "we can't let that get out," and Foster believed he might lose his job if he revealed his cost estimates.

Lawmakers of both parties said the law would not have passed in its current form if Congress had known of the higher cost estimates.

Federal law states that no federal money can be used to pay the salary of any federal employee who "prohibits or prevents, or attempts or threatens to prohibit or prevent, any other officer or employee of the federal government'' from communicating with Congress. Therefore, the GAO said, federal money could not be used to pay Scully's salary after he began making the threats to Foster in May 2003.

The Bush administration responded that the law cited by the GAO is unconstitutional.

The GAO rejected that argument, noting that no court has ever held the law unconstitutional, and the cost estimates were neither classified nor privileged. The GAO said that Scully's threats to the actuary were "a prime example of what Congress was attempting to prohibit'' when it outlawed such gag rules.

Scully now works for a law firm and a private investment firm and has registered as a lobbyist for Abbott Laboratories, Aventis Pharmaceuticals, Caremark Rx and other health care companies.

For an article on the GAO's legal opinion in the New York Times, go to: http://www.nytimes.com/2004/09/08/politics/08medicare.html (Free registration required and article may no longer be available free of charge.)

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Last Modified: 09/08/2004

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